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How to make a profit with OHS

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QUEENSLAND Safety Forum speakers Tracy Hempel and John McCarron of Stack Masula say the business case for occupational health and safety (OHS) is clear.

In this preview of their paper, to be presented on June 22 at the Brisbane Convention and Exhibition Centre, they ask why finance and human resources are considered vital to running a business, while workplace health and safety is often just a "tack on".

The business case for occupational health and safety is strong. Not only does it save businesses money everyday, it also provides an invaluable defence in the event of prosecution. Two examples illustrate the benefits beautifully.

In 1997, the United Kingdom's Royal Mail implemented a safety management system (Greenstreet Berman Ltd 2004) and reaped significant benefits, including:

* 40% reduction in days lost per employee through accidents and ill health

* The reduction in days lost equated to approximately $1.6 million

* 50% reduction in the yearly number of civil claims against that organisation

* 40% reduction in reportable injuries, more effective accident investigation

* Monitoring of safety improvements as a result of investigations

* Better record keeping and better audit data enabling benchmarking and continuous improvements.

In contrast to the Royal Mail, Australian company Boyne Smelters Limited was prosecuted in 2002, after an employee was killed, for not "ensuring the workplace health and safety of each of the employer's workers at work".

The court found Boyne Smelters not to have written procedures of inspecting machinery or work practices in place. While the employee's family continues to bear the ultimate cost, Boyne Smelters was fined $40,000, faces a tarnished reputation and its staff members must deal with the psychological cost.

OHS management systems explained

An occupational health and safety management system (OHSMS) is the foundation for safety at work.

Australian Standard/New Zealand Standard (AS/NZS) 4801 defines an OHSMS as "that part of the overall management system which includes organisational structure, planning activities, responsibilities, practices, procedures and resources for developing, implementing, achieving, reviewing and maintaining the OHS policy and so managing the risks associated with the business of the organisation."

AS/NZS 4801 provides guidelines on creating an OHSMS that is appropriate, integrates other functions and systems of the organisation, improves the organisation's overall performance and assists it to meet its legal responsibilities. AS/NZS 4804 provides general guidance on how to set up and continually improve an OHSMS.

What's behind the growth of OHS

Bohle and Quinlan suggest that the use of OHSMS’ in Australia has been adopted by a number of influences since the 1980s.

Larger companies have adopted OHSMS to meet complex legal requirements of international quality, environment and safety standards. In addition, consultants promoted the implementation of OHSMS to market audit tools and to highlight best practice OHS.

Bottomley suggests the adoption of OHSMS’ has been boosted by major disasters and increasing regulation. The Piper Alpha incident in the eighties was a shocking example of what can result from an organisation lacking properly managed safe practice systems.

This disaster helped push OHS systems into public view, increasing awareness in the corporate world and encouraging companies to view safety management as importantly as other business management activities.

The movement has been strengthened by governments requiring accredited OHSMS’ that meet AS/NZS 4804:2001 and AS/NZS 4801: 2002 as part of tenders for public projects.

Unlike countries such as Norway and Sweden, Australia has not made OHSMS mandatory. OHS agencies do, however, encourage the implementation of OHSMS through formal accreditation processes (such as NSW's SafetyMAP) and also take them into account when deciding on prosecuting or penalising establishments (Bohle and Quinlan).

In a highly regulated environment, the cost of poor OHS management can be significant for the employer in terms of workers compensation, fines and prosecution.

Likewise, WorkCover Victoria promotes benefits such as the verification of safety performance, due diligence and cost efficiencies where implementing an OHSMS.

Research shows businesses are motivated by another set of factors. Investigation by Entec (1998) indicates adverse publicity resulting in loss of credibility, poor business relationships with other suppliers, avoidance of the costs of injury, adverse impacts on staff morale as well as productivity and the perceived duty to comply with health and safety obligations are attention-grabbing incentives for larger businesses to incorporate an OHSMS.

For smaller workplaces, the barriers are considerable. Researching small NSW organisations in 1999, Lamm found that competition with larger businesses in the areas of cost cutting, the lack of resources and training, the cold reception to OHS authorities and the requirement of documented safe work practices to foster business relationships impact the use of implementing OHS systems.

Saving money, building protection

Implementing OHS into management systems makes good business sense.

Whether it is to avoid prosecution or to bid for government tenders, OHS management systems can save workplaces money, act as a legal defence in the unfortunate case of an incident, and provide good customer and public relations with the flow-on benefit of increased staff morale.

The Queensland Safety Show and Queensland Safety Forum will run from June 21-23, 2006 at the Brisbane Convention and Exhibition Centre. For more information on the show, contact Australian Exhibitions & Conferences .

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